It's expected expanding places will lead to the government subsidising an extra 80,000 students by 2018 at a cost of $820 million.

However, it will still bank $1.1 billion from cutting an average 20 per cent from student payments.

Non-university providers will get smaller subsidies than universities.

Mr McComb said the finer detail of arrangements were still to be negotiated.

"Some of that is not cheaper to teach in fact, the sort of work you need to do with sub-bachelor degree students," he told AAP.

The group representing all universities was more circumspect about the changes, saying it was disappointing the likely increase in student fees was being offset by a significant drop in government contributions.

The budget changes will affect anyone who accepts a higher education place after Wednesday.

Students already enrolled at the time of the federal budget won't be affected unless they're still studying at the end of 2020.

In a small sweetener, universities will have to put $1 from every $5 raised from fee hikes into scholarships.

Students, however, don't think that is especially sweet.

"(Treasurer Joe) Hockey is claiming to provide more opportunity for low-SES (socio-economic students) and rural students while he's making them foot the bill for their own scholarships," Ms Hopper said.

Another $3.3 billion will be saved from changes to the higher education loans program.

Graduates will have to start repaying the loans once they earn $50,638 from mid-2016, almost $700 less than now.

Their debts will be indexed at a higher rate, capped at 6 per cent, depending on what it costs government to borrow.

At the moment, the rate is indexed in line with inflation - currently about 2.5 per cent.